City asked to involve others in tax talks

Peter Roper Reporter @RoperPeter

Tuesday

Aug 30, 2011 at 12:01 AM

City Council faced two passionate issues Monday night — whether to change how the Urban Renewal Authority of Pueblo collects tax revenues, and whether Black Hills Energy is addressing complaints that it is cutting off electric power to too many poor people.

Stephanie Garcia, president of the Pueblo City Schools board, came to council to argue that the school district and other local taxing districts are losing revenue when the Urban Renewal Authority of Pueblo is allowed to collect tax revenues for 25 years from its special project areas around the city.

Those local governments, including the Pueblo City-County Library District, are crafting a ballot question that could force a vote to require their participation in council's oversight of the renewal authority.

"All we want is a seat at the table," Garcia told council at its work session Monday night.

Council understands Garcia's financial lament — the school district has lost $7 million in state financing and another $1.3 million in local revenue has gone to Urban Renewal instead.

The authority pays for new development in city-approved project areas by being allowed to keep something called tax-increment financing, or TIF. That is the revenue from any growth in property values as a result of development in an urban renewal area. Supporters argue that the authority only receives revenues that come from its own work in improving local property values.

Typically, the city has allowed the authority to collect those TIF revenues for as long as 25 years.

Garcia told council that for district students, 25 years is too long to wait to benefit from new development. If the school district or other local governments were involved, those times would be shortened to fewer years, she said.

Councilwoman Vera Ortegon was sympathetic, but said it was unworkable to bring all the taxing entities into negotiations when the city is contemplating a new Urban Renewal project area or negotiating with a major employer.

"There's a difference between being consulted and having a seat at the table," she told her council colleagues.

Gary Trujillo, chairman of the authority board, argued that council has approved all of the special districts and that TIF revenue has been used for agreed purposes, such as paying for the city's new Downtown parking building.

No decision was reached at the work session but some essential bargaining positions were staked out.

Councilman Steve Nawrocki told Garcia that he wasn't willing to eliminate Urban Renewal over the TIF question, but said he didn't want other local governments, such as the school districts, carrying too much of the tax burden for development.

Which leaves council and the school district where they started Monday night — at odds over a potential ballot question that could change how the city and Urban Renewal have done business. Both sides said they should continue discussions.

Council got some better news from Chris Burke, vice president for Black Hills Energy's electric and gas services in Colorado.

The utility has been under fire from local charities that claim it is disconnecting too many low-income and poor people. Burke told council the utility is discussing several proposals with local human-service agencies, including Catholic Charities, the Posada emergency shelter and Centro de Los Pobres.

Burke said that more than 80 percent of the people disconnected by Black Hills (between 500-600 per month) fail to take advantage of all the lower-cost payment options available to them — such as budget billing or monthly installment plans. Instead, those people often contact charitable groups like Posada or Centro de Los Pobres for emergency help.

So Black Hills is considering paying those agencies $50 for each customer that is referred back to the utility for help. Those customers would then be handled by a new Payment Assistance Team that would enroll them in one of the utility's payment programs. It means those customers would be given at least another option or two in paying their bill before facing any threatened cutoff.

"The key is to keep people from losing service because once they are disconnected, then they have to face reconnection fees and security deposits," he said.

In addition, Burke said Black Hills would probably establish a local financial assistance telephone number to give local customers a number to call for help.

"I don't want to create an unrealistic expectation that we can solve everyone's problems, I think this is a constructive first step," he told council.

While several council members complimented Burke for drafting some answers to a difficult problem, not everyone agreed.

Council President Ray Aguilera quizzed Burke on how much money Black Hills donates to the state's low-income energy assistance program each year and he blanched when Burke explained it was about $35,000.

"You guys make millions and all you can give is $35,000?" Aguilera said.

Burke answered that Black Hills Energy isn't making a profit yet off its local operations, although its larger multi-state parent company is.

"I'm sorry, but I think you're cheapskates," Aguilera told him.

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